China joins US in opposing EU’s airline carbon tax

AFP, BEIJING

China yesterday joined Washington in opposing a “unilateral” plan by the EU to impose carbon emissions charges on all airlines in its airspace from Jan. 1.

The comments from China’s foreign ministry came after the EU’s highest court threw out a bid by US and Canadian airlines to block the introduction of the scheme, also triggering an angry response from Washington.

“We hope the European side will be prudent and practical, and deal with this issue appropriately through consultation with relevant parties including China,” he said.

Airlines around the world have denounced the EU plan to charge them for carbon emissions, warning it would cost the industry 17.5 billion euros (US$22.9 billion) over eight years.

China has said it fears its aviation sector would have to pay an additional 800 million yuan (US$126 million) a year on flights originating or landing in Europe, and that the cost could be almost four times higher by 2020.

Under the EU scheme, airlines would have to pay for 15 percent of the polluting rights accorded to them in 2012, the figure then rising to 18 percent between 2013 and 2020.

The tax would affect all of China’s major airlines — including Air China, China Eastern and China Southern, the China Air Transport Association (CATA) previously said.

A spokesman for CATA declined to comment when contacted.

China reportedly blocked an order by Hong Kong Airlines for billions of euros’ worth of Airbus aircraft earlier this year in retaliation for the EU move, underscoring the potential for a significant trade row.

Chinese state media yesterday quoted CATA deputy secretary Chai Haibo (柴海波) saying he had urged government agencies to take “trade countermeasures” against the EU.

The US airlines association that brought the case before the European Court of Justice said it would mull further action in the English High Court, but meanwhile would comply with the European Union — though “under protest.”

North American carriers argued the decision was discriminatory and amounted to a backdoor tax.

The court ruled that the EU’s approach was valid, and that it “infringes neither the principles of customary international law at issue nor the Open Skies Agreement” covering trans-Atlantic flights.

The decision was welcomed by the EU, which told US airlines to get ready to obey the law in the same way European companies respect US regulations.

The threat of knock-on effects hung in the air, however, after a warning by US Secretary of State Hillary Rodham Clinton of possible reprisals some days ago.

The judgement “risks unleashing a trade war between Europe and the United States,” a high-ranking aviation source said.

The European Commission said after the ruling that the Emissions Trading System would come into force as scheduled.

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